SWEDEN: ELECTION OUTLOOK

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06141873
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: December 28, 2022
• Document Release Date: September 25, 2017
• Case Number: F-2016-02688
• Publication Date: September 12, 1988

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GONFID'eN-T1AL
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Cent
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Washington, D. C.20505
DIRECTORATE OF INTELLIGENCE
12 September 1988
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Sweden: Election Outlook
Summary
September opinion polls indicate that Sweden's ruling Social Democratic
Party (SDP) will probably be able to form a new government following the
18 September national election. The SDP may lose the working majority it
traditionally secured with support from the Left-Party Communists (VPK),
however, and have to depend on the passive support of the upstart
Environmental Party (Greens) in order to form a minority government.
Polls conducted in June--prior to a scandal involving a government
sponsored secret investigation into the murder of former Prime Minister
Olof PaIme in 1986--had shown the SDP in a dead heat with the
nonsocialist bloc consisting of the Moderate, Liberal and Center Parties.
Current polls indicate a decline in SDP popularity--probably reflecting a
loss of SDP votes to th(b)(3)- "-lens, rather than an increase in support for the
This memorandum was prepared by Office of European
Analysis and Office of Leadership Analysis. Comments and queries are
welcome and may be directed to the Chief,
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EUR M 88-20128
LDA M 88-20035
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nonsocialists. The Greens--who are expected to win representation in the
Riksdag for the first time--have said that they will not enter into a
coalition with either the socialist or nonsocialist blocs, but will sur(b)(37
Social Democratic government on an issue-by-issue basis.
Neither a minority Social Democratic government nor a nonsocialist
coalition government would be likely to significantly change domestic
policy, although the nonsocialists want to hold social spending at current
levels while increasing defense spending. Both blocs would continue to
pursue improved relations with the US and would want to avoid the
bilateral strains that festered under Prime Minister Palme. Even the
nonsocialists, though, would retain the Swedish penchant for speaking out
on regional security anA -"--Irmament issues in a way that tends to equate
the West with the East.
Will Economic Success Outweigh Political Scandals?
The Social Democrat's campaign strategy has highlighted the party's economic
accomplishments since 1982--pursuing a macroeconomic policy that increased the
private sector's share of GDP, reduced the budget and trade deficits, and held down the
unemployment rate, which is now at its lowest level in this decade. Consequently, the
SDP is boasting that Swedes are better off than ever, and are contrasting their last six
years in power with the 1976-1982 period when unemployment reached record highs
under nonsocialist rule. SDP domestic policy strategists�primarily Prime Minister Ingvar
Carlsson and Finance Minister Kjell-Olof Feldt--remain popular because of their
association with Sweden's economic recovery. Although over 90 percent of economic
growth since 1982 has been swallowed by taxes, the tax burden has not become a
pivotal issue to the same extent as in previous elections. As a result, the nonsocialists'
advocacy of major tax reform, which they have long hoped would become a salient
issue triggering a political realignment, has not benefitted them in this campaign.
The rise of the Greens has undercut somewhat the SDP's ability to maintain its level of
support by pointing to its economic successes. Instead, many members of the SDP's
"environmental wing" are defecting to the Greens because of their growing concern over
nuclear power--a trend which accelerated after Chernobyl--and other enviromental
issues. The Carlsson government tried to staunch this flow by proposing to close down
two of Sweden's 12 nuclear reactors by the mid-1990s and the remaining plants in
2010. Even though this proposal would be extremely costly given that nearly half of
Sweden's electricity is nuclear-generated, environmental hardliners are unimpressed and
back the Greens' demand that all Swedish nuclear reactors be closed within the next
three years. Consequently, we believe the Social Democrats have written off many of
these hardliners, and instead are counting on their traditional labor union base. Despite
trade union opposition to the SDP's plan to dismantle Sweden's nuclear power plants,
we do not expect significant labor defections to the nonsocialists; some may, however,
not vote at all. (b)(3)
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Political Scandals Involving SDP Leaders
A series of scandals has also overshadowed the SDP's economic success and seriously
damaged the Social Democrats' image of moral superiority. By early summer, the
Government had suffered through two major scandals involving Social Democratic
leaders condoning illegal arms sales and the use of influence by party and trade union
officials to receive special consideration for housing in the extremely tight, government
controlled market. The subsequent Ebbe Carlsson affair, however, coming just befnrP
the election, could prove to be the most damaging to the Social Democrats.' (b)(3)
In this latest scandal, Justice Minister Anna-Greta Leijon--previously one of Carlsson's
most popular ministers--admitted to using her position to support a privately financed,
secret investigation of the Palme assassination by Ebbe Carlsson, and appeared to place
herself above the law in a country that holds the legal system sacrosanct. Prime
Minister Carlsson himself came under strong criticism for his staunch defense of Leijon,
but his confident performance before a parliamentary committee investigating the affair
helped him recover some lost ground. It is unclear what effect the hearings--the first
to be nationally televised--4)ad on the populace as many Swedes were on summer
holiday, but WP believe the whole affair probably further eroded public faith in the SDP
governmen(b)(3)
The nonsocialists, for their part, still suffer from the perception by most Swedes that
they are incapable of leading the country--a point emphasized by a recent poll which
showed that half of the likely nonsocialist voters believe that the Social Democrats will
form the next government. Although they have tried to capitalize on the recent
scandals involving the Social Democrats, the nonsocialists have instead had to devote a
significant portion of their campaign to convincing voters that the three parties present
a viable, cohesive option. Despite their efforts, we do not believe the nonsocialists have
been able to override the memories of policy failures when they governed from
1976-1982, especially in economic policy. By contrast, the Social Democrats have
successfully claimed that their economic policies have corrected the economic ills
caused by the nonsocialists during that period. (b)(3)
Social Democratic - Led Government Still Likely
The Social Democrats are likely to slip from their current level of 159 seats (out of 359)
in the Riksdag with most of their lost support going to the Greens rather than the
nonsocialist parties. In order to remain in power after the election, the Social
Democrats will either have to continue their cooperation with the Left-Party Communists
(VPK), garner the support of both the VPK and Greens, or form a coalition government
with the nonsocialist Center Party. Some Social Democrats traditionally vote for the VPK
in national elections to ensure a socialist majority. This year, however, the Social
Democrats may lose additional votes to the left because the party's squeaky-clean
image has been badly tarnished by the recent scandals. In addition, many SDP partisans
1 Ebbe Carlsson--no relation to Prime Minister Ingvar Carlsson--is a wealthy publisher
with close ties to the SDP.
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believe the government has not hppn aggressive enough on environmental issues and
are turning toward the Greens. (b)(3)
Nonetheless, we believe that a Social Democratic-led government remains the most _
likely outcome in the election, given nonsocialist party divisions and lack of public
confidence in their ability to govern. A Social Democratic government would continue
with its present domestic and international agenda--maintaining a tight fiscal policy to
eliminate the budget deficit while trying to honor its pledge to increase annual paid
vacation from five to six weeks, and participating in international peace and
disarmament efforts. A strong showing by the Greens, particularly if the VPK fails to
remain in parliament--which cannot be ruled out given recent polls--could force the
Social Democrats to address controversial enviromental issues, such as an accelerated
closing of all 12 of Sweden's nuclear reactors within the next three years. We do not
believe, however, that they would accede to the Greens' demand to close all plants so
rapidly due to the high cost of finding other energy sources. If the Social Democrats do
not meet most of the Greens' enviromental demands, we believe that the Greens would
not support the Social Democratic legislative agenda and the Social Democrats would
then be forced to seek co----mises with one or more of the nonsocialist parties on an
issue-by-issue basis.
If the the Social Democrats are unable to form a government with the support of either the
VPK or the Greens, we believe the SDP leadership would explore the possibility of
forming a coalition with the Center Party rather than forfeit power. The Social
Democrats have already sent some signals to the Center Party through Stig Maim, the
leader of the major labor organization in Sweden, who has suggested that the two
parties can find a basis for cooperation. Although Center Party leader Johansson has
publicly rejected these overtures, claiming his preference for joining a nonsocialist
coalition, we believe he would seriously consider an inivitation to form a SDP-Center
government as aib-x-ertunity to rebuild support for his party, which has flagged while
in opposition.
On foreign policy, Prime Minister Carlsson has sought to return Sweden to a
constructive dialogue with the US in an effort to repair the damage from the more
turbulent Palme era. Although Carlsson and other party leaders at the 1987 party
congress managed to defeat a grassroots effort to tighten the Social Democrats policy
on nuclear-capable ship visits, a Social Democratic government would remain active in
international forums for nuclear disarmanent. The Social Democrats will continue to
believe that they should act as the world's conscience, and moral concerns will remain
the driving force behind Swedish foreign policy. At the same time, Stockholm will
remain wary of Soviet diplomatic advances and will continue to stress that Sweden will
only discuss arms control and confidence-building measures in conjunction with its
Nordic neighbors and in such a way as to respect Danish and Norwegian membership in
NATO. Nonetheless, Stockholm considered the recent agreement with the Soviet Union
on the boundary dispute in the Baltic Sea as a sign that relatinns with Moscow will
continue to improve following strains in the early 1980s. (b)(3)
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If the Nonsocialists Win
A nonsocialist coalition would be unlikely to pursue domestic economic policies that
differ significantly from the current government's, especially because they have not
agreed on a common platform that seriously challenges Swedish social democracy. In
addition, a nonsocialist coalition would probably clash on some of the key issues that
garnered it voter support. While the Moderates and Liberals would like to privatize
many government services, reduce taxes and pursue EC membership, these moves
would put them at odds with the Center Party. For instance, the Moderates and Liberals
support partial privatization of the cradle-to-grave health care system, while the Center
Party wants to maintain the current trouble-plagued system by allocating additional
funds in an effort to make it more efficient. The three nonsocialist parties are also split
on the nuclear power issue. The Moderates support continued reliance on nuclear
power, asserting that greater pollution in the future would result from the increased use
of fossil fuels, but the Center Party supports the Social Democrats' plan for closing the
two reactors by 1995 and subsequently shutting all plants. (b)(4
On defense and security policy, the nonsocialists would probably try to increase the
defense budget and would remain wary of Soviet diplomatic gestures. A nonsocialist
government would probably push for a review of the 1988-1992 defense plan as early as
1990 and would be somewhat more likely to trade off higher defense spending for
restraints in social expenditures. Although Moderate Party leader Carl Bildt takes a
harder line towards the Soviet Union than other nonsocialist leaders, we do not believe
there will be a significant change in Sweden's relationship with the So-,-* i!nion in the
absence of a repeat of the 1982 "Whiskey on the Rocks" incident (b)(3)
Overall, we believe a government of nonsocialist parties would resume its internal
bickering�usually abandoned during the campaign--which would thwart its
post-election momentum. In the worst case scenario, disagreement among the
nonsocialists would prevent the parties from concentrating on a unified legislative
program and could lead to a parliamentary stalemate as each party sought a cosponsor
for its pet issues. (b)(3)
Implications for the United States
Regardless of the outcome of the election, we expect the next Swedish government to
place high priority on fostering good relations with the US. Nonetheless, Sweden will
continue to "agree to disagree" Imith the US on several international issues, particularly
on US policy in Central America.(b)(3)
If the Social Democrats return to power, the US can expect relatively little change in
relations with Sweden. A returning socialist government will probably continue to resist
rank-and-file calls for tightening Swedish nuclear ship visit policy or for supporting an
acceleration of the Nordic Council's deliberations on a Nordic Nuclear-Weapons-Free
Zone. If the Greens play a significant role in the next government, they may be able to
stir significant grassroots pressure on the government to reverse these positions. In
any event, a Social Democratic government is likely to continue to criticize US policy on
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regional issues, such as Central America. Eventually, the Social Democrats may begin to
shed the caution that has tempered their rhetoric since the Carlsson visit to the UP I--*
year and revert to their traditional moral posturing on "North-South" issues. (b)(3)
While a nonsocialist government may temper the rhetoric against US policy in Central-
America even further--particularly if Permanent Undersecretary of Foreign Affairs Pierre
Schori is replaced--the Liberal and Center parties would probably continue to seek
some role-for Sweden as a "moral conscience" on the world scene. The nonsocialists
would continue the Carlsson government's efforts to play down Soviet security
proposals for the Nordic region and calls for establishing tighter rules for visiting
warships. Although either a socialist or a nonsocialist government would implement
policies to facilitate adaptation to the EC's 1992 internal market reforms, a nonsocialist
government would probably be fraught with bickering between the Moderates, who want
to join the EC, and the Center Party, which opposes such a move. (b)(3)
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